Dealer says Chrysler plans to significantly reduce its product lineup, number of dealerships

JEFF KAROUB

Published 6:00 pm, Thursday, February 7, 2008

AP Business Writer

Chrysler LLC plans to significantly reduce its product lineup and number of dealerships as the automaker rolls out a new corporate initiative, a Chrysler dealer in Texas said Friday.

The automaker has told dealers as it outlines its Project Genesis plan that it could cut its number of models by as much as half and reduce the number of dealerships selling its cars by as much as a third in an effort to boost efficiency, according to Alan Helfman, vice president of River Oaks Chrysler Jeep in Houston.

"I think they're trying to get a little leaner, a little more efficient," he said.

Chrysler spokeswoman Lori McTavish declined to comment, but the company said in a statement that it plans to align Jeep and Dodge product offerings under one roof.

"At this point, we have not made any final decisions regarding our dealer optimization or future product plans, nor has the company set any firm timelines," Jim Press, president and vice chairman, said in the statement.

Helfman said it looks like a good step by the company, but he's concerned about how it might be carried out.

He said Chrysler could run into trouble with state franchise laws that in part protect dealers from going out of business.

"We have two of the largest dealerships in Houston," he said. "I'd love both of them to be … `Genesized,' but tell me how to do it."

Chrysler earlier this month said it was launching a new ad campaign that includes lower prices on 12 of its vehicles. The campaign aims to cast the automaker as a company that's listening to consumers and responding with new features.

Chrysler, which is in the midst of a restructuring after a majority stake in the automaker was sold last summer to private equity firm Cerberus Capital Management LP, announced in November it planned to cut up to 11,000 jobs, including 8,000 to 10,000 hourly and 1,000 salaried positions.

The cuts came in addition to 13,000 reductions Chrysler announced last February, including 11,000 hourly and 2,000 salaried workers in the U.S. and Canada.